D.C. Week: Supreme Court Hears Subsidies Case

Lawyers for both sides of King v. Burwell faced piercing questions.

WASHINGTON -- As the nation's capital continued waiting for winter to end, the Supreme Court heard oral arguments this week in the case involving subsidies for people buying health insurance through the federally run insurance exchanges.

Plaintiffs' attorney Michael Carvin, JD, arguing that the subsidies were illegal, had barely begun his presentation before he was interrupted by Justice Ruth Bader Ginsburg asking whether the four plaintiffs in the case were qualified to bring a lawsuit, an issue known as "having standing." Questions of standing have been raised because several of the plaintiffs were thought to be eligible for veterans' healthcare and therefore wouldn't be affected by the subsidies, while another plaintiff will shortly be eligible for Medicare.

Carvin, whose fees are being paid by the Competitive Enterprise Institute, a right-leaning think tank, assured Ginsburg that the plaintiffs did have standing to bring the case; Solicitor General Donald Verrilli Jr., JD, who argued for the Obama administration, later said the administration was willing to stipulate that at least one of the plaintiffs had standing and therefore the case was eligible to be brought.

The plaintiffs contend that the wording in the statute referring to exchanges "established by the state" means that only consumers who purchase insurance in state-run exchanges are eligible for subsidies, which would leave out consumers in the 34 states that have defaulted to the federally run exchange.

Justice Samuel Alito asked Verrilli why Congress would have used the phrase "established by the state" if that's not what they meant. "Why didn't they include a provision saying that an exchange established by HHS is a [state] exchange?" Verrilli said the entire phrase included the words "established by the state in Section 1311," and that that section refers to an exchange established either by the state or the federal government.

FDA: Unapproved Duodenoscope OK to Use

Although one of the duodenal endoscopes implicated in recent "superbug" infections was never cleared by the FDA, the agency said Wednesday that physicians should continue to use it because otherwise there wouldn't be enough devices available to meet patient needs.

Also, the FDA pointed out that infections have occurred with other duodenoscopes that had been approved, reiterating that the designs of all these devices made them hard to disinfect thoroughly after use.

The problem came to the fore 2 weeks ago, when two deaths and several other infections at a UCLA hospital were attributed to duodenoscopes contaminated with carbapenem-resistant Enterobacteriaceae (CRE) bacteria. Afterward, the FDA acknowledged that it had received 135 reports of such infections in conjunction with duodenoscopic exams since January 2013 but hadn't taken action.

In recent years, Medicare's Recovery Audit Contractors (RAC), who are paid to look for overpayments, have been targeting claims for 1-day inpatient stays, which are reimbursed at a much higher rate than regular outpatient care.

Auditors' heightened scrutiny has persuaded some providers to reduce admissions and increase outpatient observation, which can also have negative consequences. For example, some patients who are kept under observation for a few days and then transferred to skilled nursing facilities (SNFs) are surprised to learn that they are ineligible for Medicare coverage at the nursing home because they didn't meet a 3-day inpatient stay requirement.

In an attempt to improve patient liability and education, the commission recommended that Congress revise the SNF eligibility requirement for formally admitted patients, so that time spent in outpatient observation status also counts as part of their 3-day prior hospitalization requirement. The commission also suggested requiring that all acute-care hospitals notify Medicare beneficiaries in outpatient observation status for more than 24 hours that being under observation may impact their cost-sharing for their current hospital visit as well as their eligibility for SNF coverage.

AAMC: Big $$ Needed to Forestall Doc Shortage

The Association of American Medical Colleges (AAMC) released new projections Wednesday for physician supply and demand, and requested a heavy lift from Congress to help curb the physician shortage -- though some critics questioned the new estimates.

A report prepared for the AAMC forecast a shortage of between 46,000 to 90,000 physicians across the country by 2025 -- lower figures than its 2010 report, which estimated the nation would be short more than 130,000 physicians.

The difference was attributed to several factors: the Census Bureau's own downward revision of population projections, soaring numbers of nonphysician providers such as nurse practitioners, and the implementation of the Affordable Care Act.

Next Week

On Monday, the FDA's Dermatologic and Ophthalmic Drugs Advisory Committee will meet to discuss a new drug application for deoxycholic acid injection, a cytolytic drug, submitted by Kythera Biopharmaceuticals for the improvement in the appearance of moderate-to-severe convexity or fullness associated with submental fat in adults.

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